November 28, 2018

Medicare supplement plan basics

Original Medicare covers a significant percentage of your costs for medical procedures, hospitalization, and supplies. However, Original Medicare, Part A and Part B, doesn’t cover everything. Consequently, if you are a Medicare beneficiary, you may be considering a Medicare Supplement.

A Medicare Supplement plan, which is also referred to as Medigap, is made available through private insurers. These plans pay for some of the medical and hospital charges that are not covered by Original Medicare, including deductibles, coinsurance, and copayments.

In essence, Medicare Supplement plans help fill the reimbursement gaps that are left after Original Medicare, Part A and Part B, has already paid its portion of Medicare’s allowable charges. Some Medigap plans even cover several services that Original Medicare does not pay for. In addition, a couple of Medigap plans have an annual out-of-pocket limit that can help further minimize the financial impact of your healthcare.

Presently, 10 different Medicare Supplement plans are available in most states, including Hawaii. Each plan has its own designated letter—A, B, C, D, F, G, K, L, M, or N.

Here is a bit of additional information about Medicare Supplement plans to help you better understand what they offer.

Who Is Eligible for a Medicare Supplement Plan?

To be eligible for a Medicare Supplement policy, you must already be an Original Medicare beneficiary. Also, you must maintain your enrollment in Original Medicare for the duration of your Medigap coverage.

In some states, you are only eligible for a Medicare Supplement plan if you are at least 65 years of age or older, even if you qualify for Original Medicare because of a disability or end-stage renal disease. However, in Hawaii, that is not the case; Medigap coverage is available for Original Medicare beneficiaries before their 65th birthday.

What Benefits Are Covered by Medicare Supplement Plans?

Your supplemental plan can only be used in conjunction with your Original Medicare benefits. It is not designed to provide standalone coverage. Additionally, you cannot use a Medicare Supplement plan to help pay for uncovered expenses associated with a Medicare Advantage plan.

Depending on the Medigap plan that you select, your coverage will vary. However, a Medigap plan that is designated by a particular letter offers the same benefits, regardless of the insurer that provides the coverage or your state of residence. For instance, Medicare Supplement Plan B coverage is the same in Hawaii as it is in Georgia.

Here are some of the benefits that are covered by all Medicare Supplement plans:

  • Part A hospice expenses
  • First three pints of blood
  • Coinsurance for Medicare Part A
  • Co-payments or coinsurance for Medicare Part B

Medicare Supplement plans often pay 100 percent of covered costs. However, some plans may have specific criteria and coverage limits for certain co-payments, such as those for office and emergency room visits.

In addition to the benefits covered by every Medigap plan. Some plans also pay for:

  • Travel to a foreign country for an emergency
  • Coinsurance for skilled nursing care
  • Deductibles for Medicare, Part A and Part B
  • Charges that exceed Medicare Part B limits for services from a non-participating provider

What Benefits Are Not Covered by Medicare Supplement Plans?

Some benefits are not covered by Medigap plans. Here are a few of them:

  • Dental care
  • Hearing aids
  • Long-term nursing facility care
  • Eyeglasses
  • Prescription drugs

To receive coverage for your prescription medicines, you can enroll in a separate Medicare Prescription Drug Plan.

What Types of Plans Do People Confuse With Medicare Supplement Plans?

Some Medicare beneficiaries have multiple insurance plans and may believe that they are already enrolled in a Medigap plan, even if they aren't. Here are a few types of insurance that are not Medicare Supplement plans:

  • Medicaid
  • Long-term care coverage
  • Medicare Advantage plans
  • Group plans from an employer

If you do have one of the insurance plans listed above, keep in mind that you may still be eligible for a Medicare Supplement plan as long as you meet the eligibility criteria.

How Do Medicare Supplement Plans Differ from Medicare Advantage?

Medicare Advantage plans are also known as Medicare Part C. The plans offer coverage through private insurers that Medicare has approved. The benefits provided do not supplement Original Medicare, Part A and Part B. Instead, they replace it. Nevertheless, hospice benefits are provided through Part A, regardless.

Medicare Advantage coverage also includes some benefits that are not provided through Original Medicare, Part A and Part B, such as coverage for prescription drugs, dental care, and vision services. These additional benefits are not offered through Medicare Supplement plans.

Medicare Advantage plans cannot be supplemented by a Medigap plan. Consequently, a Medicare supplement plan can't be used to cover the deductibles, copayments, or other out-of-pocket expenses that Medicare Advantage does not pay.

If you do decide that a Medicare Advantage plan is right for you, be sure to cancel your Medigap policy when you make the switch from Original Medicare. Once you enroll in Medicare Advantage, you will have a trial period, which is usually your first 12 months under the plan. During this time, you may re-enroll in the Medicare Supplement plan if you decide to switch back to Original Medicare.

What Else Do You Need to Know About Medicare Supplement Plans?

Here are a few additional points that apply to Medicare Supplement plans:

  • Only one person can be covered. If you and a spouse need supplemental coverage, two separate policies would need to be purchased.
  • The cost of a plan may differ based on your plan selection and location.
  • In some states, only certain plans are available.
  • In most cases, you can use your Medigap insurance with all providers that accept Medicare. However, some plans may restrict your provider selection to hospitals and doctors that participate in a special network of providers.

If you are interested in choosing a Medicare Supplement plan, contact our agency today.

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